Correct. New supply of iron ore anywhere in the world—assuming it happens at all—will have a higher operating cost per ton than the existing mines of large and mid-sized companies such as BHP, VALE, and CLF.
Iron-ore mines in China have an especially high operating cost due to the low ore quality, and they generally shut down quickly during a period of price weakness (such as what occurred in 2009).
VALE’s executives make these points ad nauseam on the company’s quarterly CC’s.
